Oracle: $40B Nvidia Chips for Data Center

Oracle Invests $40B in Nvidia Chips for Stargate Data Center

Oracle is set to purchase $40 billion worth of Nvidia's GB200 superchips to power the Stargate data center in Abilene, Texas. This strategic investment will support the training and operation of advanced AI systems, with Oracle leasing the computing power to OpenAI. The data center, slated to be fully operational by mid-2026, is expected to become one of the world's largest, providing 1.2 gigawatts of power.

The Stargate project, announced by President Donald Trump in January, aims to construct large AI-focused data centers across the U.S., with the first 10 facilities planned in Texas. Oracle, OpenAI, SoftBank, and MGX are equity partners in this initiative, while Oracle, Arm, Microsoft, Nvidia, and OpenAI will serve as the project's initial technology partners.

The Abilene data center has secured $11.6 billion in funding commitments, expanding its capacity to eight buildings and bringing the total investment to $15 billion. This expansion underscores the growing demand for specialized AI infrastructure, as traditional data centers struggle to meet the computational and energy requirements of AI workloads.

AI Data Centers: A New Paradigm

AI data centers differ significantly from traditional facilities. According to Deborah Perry Piscione, co-founder of Work3 Institute, AI data centers require specialized hardware and infrastructure to handle massive parallel processing. While traditional data centers focus on storage and basic computing, AI facilities need dense configurations of GPUs and AI accelerators, like Nvidia's H100s, to perform complex matrix calculations essential for AI models.

Industry Collaboration and Future Prospects

In March, Elon Musk's xAI and Nvidia joined the $30 billion AI Infrastructure Fund backed by BlackRock, Microsoft, and MGX. The fund aims to raise up to $100 billion for AI development, highlighting the industry's commitment to advancing AI technologies. Microsoft and BlackRock launched the fund last year to support the construction of data centers and secure power sources for these facilities.

The collaboration between Oracle, Nvidia, and other technology giants signals a significant step forward in the development of AI infrastructure. As AI continues to evolve, investments in specialized data centers will be crucial to meet the growing demands of AI workloads and support the next generation of AI innovations.